The Reserve Bank of India (RBI) has proposed resuming the licensing of Urban Cooperative Banks (UCBs) after a two-decade pause. A discussion paper released by the RBI seeks feedback on eligibility criteria, including a potential minimum capital requirement of Rs 300 crore for new UCBs. The move aims to strengthen the sector, with a focus on potentially licensing large, well-established cooperative credit societies that are currently regulated by registrars, not the RBI. The RBI previously halted licensing in 2004 due to the financial instability of newly licensed banks.